TSMC breaks ground on final phase of chip factory

Taiwan Semiconductor Manufacturing Co. (TSMC) broke ground Friday on the third and final phase of its "Fab 15" chip factory, with the newest phase geared to make power-efficient and high-performance microprocessors using 20-nanometer production technology.

The new process will be used to build CPUs, GPUs (graphic processing units), and application processors, said Michael Kramer, a TSMC spokesman. These products are likely to go into power-saving tablets, PCs, smartphones, and other devices. TSMC, however, declined to say what products the chips will go into, as the company does not have permission from its customers.

The company is the world's largest contract chip maker, with customers including Nvidia and Qualcomm. It started building Fab 15 in July 2010, and estimates it will invest a total of NT$300 billion (US$10.1 billion) in the factory. The company had originally planned to build it in four phases, but decided to combine the last two phases of construction, according to TSMC spokeswoman Elizabeth Sun.

The company will start producing chips with 20-nm manufacturing technology in the third quarter of next year, Sun said. TSMC and other chip makers are constantly working to improve manufacturing processes. This allows them to place more transistors on their chips, making them run more efficiently and with higher performance.

TSMC is already building chips with its 28-nm manufacturing technology. In the last quarter, the chips accounted for 2 percent of the company's revenues. TSMC expects that number to grow in the coming year as sales of tablets and smartphones continue to rise.

Fab 15's first phase, which will manufacture chips using 28-nm technology, is set to go into volume production in early 2012. Chips that will be produced at the factory include GPUs and CPUs.

TSMC is also working on building chips using 14-nm, 10-nm and 7-nm manufacturing technology, but it's too early to say when the chips will go into production, Sun said.

Fab 15's second phase is still under construction, and TSMC had yet to decide whether it will be equipped to build chips using the 28-nm or 20-nm manufacturing technology. Once all phases enter volume production, the company's Fab 15 factory is estimated to generate $6 billion in revenue per year.

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